Ditching gas heating and cooking could save you hundreds of dollars

During Melbourne’s recent spell of hot weather, my air conditioner got a workout after a long hiatus. Technically it’s a split system that also could have been used during winter, but like many Melbourne householders I also have a gas ducted heating system, and have never needed to use anything else for heating.

Gas heating systems are ideally suited to Melbourne’s cold winters. They heat quickly, it’s easy to control the temperature, and you don’t need to stand directly in front of a duct to feel the heat. Such systems have historically been very cheap to run. But in the next couple of years, major changes in the gas market will substantially increase the running cost of gas appliances for Australians.

But it will also drive household gas bills upwards. For the first time, the amount we pay for gas will be linked to the price that gas exporters can obtain from other countries. Countries such as Japan are prepared to pay significantly more for gas than we currently do, so we will pay more as a result.

International prices are still being passed through to consumers, and oil prices will eventually begin to steady. The cost of extracting gas from the ground has also increased significantly as more and more gas, from increasingly hard-to-reach places, is needed to meet international demand.

Even if international gas prices crashed tomorrow, it is unlikely we will ever pay the historically low prices for gas that we once did.

The cheaper option

Even before bills increase, the choice of gas over electric appliances is questionable. The Grattan Institute’s October 2014 report, Gas at the crossroads, shows that gas ducted heating in Melbourne already costs about A$700 a year to run, whereas reverse-cycle air conditioners can produce a similar amount of heat for only A$300. In Sydney, it costs about A$600 a year to run a gas hot water system, while an electric heat pump can do the job for half the cost. Some Brisbane households pay more than A$300 a year just to have gas cooking, when an electric cooktop would cost a mere A$40 to run.

Households can already make considerable savings by replacing a gas appliance with an energy-efficient electric one. Replacing all appliances means also avoiding the gas connection charge, typically about A$200 a year. It’s not so much that gas has become more expensive, it’s that electric appliances have become much more efficient.

Why, then, are so few households switching off gas appliances for electric alternatives? Many are not aware of the savings. Some people cannot be bothered looking for new appliances, or are renting and therefore don’t get to choose. Some just prefer using gas, because of the feel of gas heating or the control of a gas cooktop. Others will struggle to afford the upfront cost of a new appliance.

Whatever the reasons, no one likes being hit in the hip pocket, and governments will want to show they are doing something to help. But government schemes in the household energy market often have unintended consequences.

For instance, low-income households in most states get a rebate on their gas bill. Increasing this may provide some short-term relief, but it encourages households to stay connected to gas, which may be more costly in the long run.

Meanwhile, rebates for energy-efficient electrical appliances are most likely to be taken up by those who can already afford to buy new appliances, doing little to help the most vulnerable. Worse still, these rebates are typically funded by increasing the electricity bills of those who can’t afford new appliances.

Informed choices

There is a better way. Governments should ensure that consumers have the information to make informed decisions about their appliances. The Your Energy Savings website, which estimates the running costs of various electric appliances, is a good start, but more can be done to inform consumers about their gas appliances and how the price rises are likely to affect them.

Governments should also consider offering low-interest loans for energy-efficient appliances so that consumers pay off the cost of an appliance over time as they realise the savings on their energy bills. These loans could be targeted to low-income earners or even to renters.

For those who simply prefer using gas, myself included, it’s difficult to argue that governments should step in to protect such households from price rises. Why should we encourage the use of one energy source at the expense of another, let alone a less efficient one? The fact that gas heating may feel nicer than the heat from electric systems is not sufficient justification.

I have no immediate plans to get rid of my gas heating system – there is nothing better for keeping warm on a cold winter day. But the next time I need to take the morning chill off the house, I may just think of my gas bill and reach for the split system remote.

24 Comments

The Reverend Ponsenby Smythe 4 years ago

I’d be all in favour of cooking with electricity but…..it’s not the same. I have panels on my roof, awaiting the drop in price for storage and will be installing an on demand gas hot water heater so we’re no longer heating a tank and paying for it every day.

Matthew Wright 4 years ago

You obviously haven’t tried electric induction. It’s just not the same cooking on gas…

I’d be also getting a Sanden CO2 heatpump for hot water. On demand gas sucks and you’re up for the annual service fee which is rising above $1 per day just to be connected. The smart money is on an electric future with fast efficient electric appliances.

neroden 3 years ago

Electric induction sucks for frying. I’ve tried it. I suppose it depends what sort of cooking you’re doing. I do frying.

For boiling or baking or broiling or simmering or steaming, electric is fine.

Frankly I think of a gas stove as a luxury item now, probably only suitable for commercial kitchens. You don’t use much gas but you still have to pay for the connection. In some places you can get a cheaper “cooking only” rate.

Matthew Wright 3 years ago

You’d be mixing up conventional electric with electric induction. Electric induction is brilliant for frying. I’d never go back to gas and risk burns and so on when induction will do it a treat efficiently and safely.

Ben Courtice 4 years ago

I’m interested in this notion that gas heating feels better than electric. I’ll acknowledge that radiant heat feels different to ambient air temperature, so if you have a gas radiator vs a heat pump, it may feel different. But how is warm air from a gas duct different from warm air from a heat pump? Not to mention that ducted gas heating which the author says he uses is probably the least energy-efficient option available, even among the gas heaters. Mind you I don’t disagree with the findings of the research otherwise.

Tim Forcey 4 years ago

I am looking forward to this winter when I shall be testing the effectiveness of using our 7 star Daikin Ururu Sarara’s (heat pump + desiccant wheel) for heating vs the old ducted gas. The Ururu Sarara actually has a desiccant wheel which can add (or reduce) humidity as instructed. Adding humidity in winter is meant to allow comfortable conditions to be achieved at lower temperatures then one must demand from the hot & dry ducted gas. We shall let everyone know when we get there. In fact we might get a bit of a Ururu Sarara users group up and running…

Ben Courtice 4 years ago

Fair enough, but if we’re worrying that much about our comfort (humidity levels?) are we getting a bit neurotic? Mind you I grew up with only wood heaters, in a drafty Hobart house. Also: do you think Daikin could fit a few more of the letter R into their new product? I find it too easy to pronounce. 😉 On ecological grounds, rather than comfort, I’m wondering when CO2 heat pumps will be available for space heating, not just Sanden’s hot water heater.

I don’t think there is any serious obstacle to adapting a Sanden CO2 HP to heat water for hydronic space heating now. With a suitably sized insulated water tank you could use the PV solar powered HP to heat the water during the daytime when the COP is highest, for heating at night. Even off-grid, running an efficient HP is a great non FF’d way to heat your house.

Harry Verberne 4 years ago

Our gas cooktop’s ignition pack had partly failed months ago (had to use gas lighter for the affected gas ring) but in last two weeks it failed completely. Replacement ignition packs are no longer available and we were concerned about safety as there is no noise of escaping gas when a burner is turned on .Sure it would be cheaper to buy a replacement gas hob but with forecast gas price rises we decided to go with induction. Since we have solar this seems like a logical decision.

We also have gas hot water and gas central heating and these appliances should still have quite some life left in them. But when they are due for replacement we will likely ditch gas how water for solar and maybe switch heating to heat pump. I do like gas heating though!

Matthew Wright 4 years ago

You need to consider Daikin Ururu Sarara as it produces heat that feels better than gas. That’s because it electronically controls humidity. And comfort is temperature + humidity + air movement.

Mike Dill 4 years ago

Here in the USA I am paying $145.00 a year for the privilege of using gas ( connection charge). Fortunately our gas prices are still low, so the gas that I use for water and heating is only about $200.00 a year. That makes my total $345.00, which will greatly increase as the price of gas increases.

My guess is that I could eliminate that gas bill entirely with another 5KW of PV panels (not very efficient in winter), which would currently cost me about $20,000.00 (installed with racking and inverters).

That would give me a payback at about 60 years, assuming that nothing changes. Since I do not believe that prices will remain stable, I will continue to watch as the situation develops,with the price of gas increasing, and the price of PV as it continues to decline.

Matthew Wright 4 years ago

Wow, we’re getting 5kW of solar installed in Australia for $5,000 AUD when flatracked which is about $4100. We wouldn’t bother with tilts etc. Even south facing produces more electricity (facing away from the sun which is to the north in our hemisphere) than south facing optimum panels in Germany. Instead of tilts we would just oversize our inverters and install more panels

adam 4 years ago

There’s been quite a bit of work done by LBL and RMI on US installs, and a problem that’s there on “value pricing”. This is when suppliers are adding margin because the market will pay it, and it varies across the country..

I didn’t think installed cost was that high, but you could have a look at their work to see where you sit and what’s reasonable.

Also, for reference in Aus we have an incentive scheme for small systems that provides up front discoutn (STC). Matt’s figures include that. We can’t do $1/W unsubsidized.

Also, the US has FITC which is an OPEX incentive, not CAPEX so be careful with the comparisons.

ChrisEcoSouth 4 years ago

Ducted *anything* is shockingly inefficient compared to the heating/cooling medium used by typical split systems. For ducts you are transporting your medium (air) in thinly insulated ducts, at a temperature greatly different to roof ambient. In cold weather maybe 5 degrees vs 25deg, and spread over many square meters of the surface-area of the duct. Compare this to split-system medium, which transports at a much closer temperature to anbient, as it undergoes a pressure change to ‘leverage’ the temperature at the compressor or condensor end – and we talking much smaller surface area of smll-bore copper pipe. So the temperature gradient (difference) of surface area is *tiny* by comparison. I have previously done some back of envelope figures for the cooling scenario: The temp gradient effect on ducted remains massive compared to compressed refrigerant transport. Putting some figures on it: Assume 50deg roof temp, 16deg duct air, then we have 34deg gradient across R2 for 10m duct 250mm dia gives *34deg across 7.85sq m R2* Now use 10m refrigerant pipe @12.5mm, 38deg(?) compressed refrigerant, R1(?) gives *12deg across 0.393sq m R1* – which could approximate (to normalise) to *12 deg @0.79 sq m for an R2* So for the piped refrigerant we have about 30% of the temp gradient operating across about 10% of the area! Seems choice of technology is a no-brainer – splits have around 30 times more efficient coolant transport.

Chris Fraser 4 years ago

Thanks for those. is there a way of improving the situation for ducting ?, assuming the voids for old gas ducts could be useful for a new ASHP system. Perhaps a higher R rating is available.

ChrisEcoSouth 4 years ago

Short answer is no. Refrigerant in small copper pipes is orders of magnitude better. I have encontered someone who put a return duct over their combustion heater, and merrily transferred the extreme heat from that all over the house. That one’s a case of ‘who cares’, as you are generating a stupendous amount of (localised) heat anyway.

Peter D 4 years ago

Yes I was offered to connect to gas with my reno, but knew price rises were coming. I now have solar PV, solar hot water (which by the way for 5 solid months does not need the electric boost in summer), LED down lights, induction cooktop and split system inverter A/C. I am saving a lot of money and have reduced my greenhouse gas emissions significantly. I also installed roller shutters on my windows and new insulation in the roof. I have a pretty efficient house now, it was built in 1963 🙂

Harry Verberne 4 years ago

We have also added to roof insulation, retrofitted double glazing, sealed air leaks, installed led almost everywhere, have replaced a failing gas cooktop with induction. We have solar but we still have gas storage water heating and ducted gas.

One day, when the gas hot water needs to be replaced, it will be solar. I do like our gas ducted heating and would not be keen to replace with anything other than ducted reverse cycle. We currently have evaporative cooling and it dies a brilliant job for very low running cost.

ChrisEcoSouth 4 years ago

“not be keen to replace with anything other than ducted reverse cycle” See my post on ‘Ducted’ here. R/C air via splits is the only way to go IMHO – *massively* better efficient than the ducts.

Harry Verberne 4 years ago

Though I could not follow your calcs I accept your logic about split system efficiency vs ducted. I do like ducted for gas as it basically heats the entire house and you can close ducts where rooms are not in use. With splits I would need several systems to cover living areas and at least one bedroom.

ChrisEcoSouth 4 years ago

Get yourself some quotes on splits – I bought 5 decent brand from a chain store and paid an air-con qual electrician to install (plus I did some labour myself). One pipe run was 7m. Total cost was only a bit more than the cheapest ducted I was quoted. Because there is also R7+ in our roof, these air-cons always run ultra-low power, and is hardly noticeable on the bill.

Dave Smith 4 years ago

Just a point you all missed, reverse air-conditioning has a mean Coefficient of Performance of about 3.2 so for every 1kw of power you put in you get 3.2kws out. But and this is a big one this drops as the outside temp drops. At 5c the CoP is 0, meaning you get no heat no matter how much power you put in as the outdoor unit will ice over and block air flow over the condenser. below that you go backwards as the outdoor will use power to deice. There for this is not a good option for Melbourne as we often get below 5

Matthew Wright 3 years ago

You made that up.

Visit the government rating website and you’ll see that a Daikin Ururu Sarara has a COP of 5.91 @ 7C. The data sheet for MEPS shows that this reduces to 5.0 at 0C. The unit drops to a COP of 1.0 (not zero) at – (minus) 18C

Dave Smith 3 years ago

No, I’m talking your average home split system. Now you are technically correct but as you know water condenses on cold surfaces, @4c the out door unit coil temperature drops below 0c this causes it to ice over restricting airflow and can block entirely, any good ac has a deicing mode this is ether reversing the ac to heat the out door unit and melt the ice or use resistive heating on the coil. The These are energy intensity, better option is a ground coupled heat exchanger this will give a cop of around 5.5 regardless of outside temperature but are expensive.